If the opportunity cost of capital for a project exceeds the project's IRR,then the project has a(n):
A) positive NPV.
B) negative NPV.
C) acceptable payback period.
D)borrowing projects

Question

Quizplus · Accepted Answer

The opportunity cost of capital (also known as the required rate of return) represents the minimum rate of return that an investor or company would require from a project to compensate for the risk of investing in that project. If the opportunity cost of capital exceeds the project's internal rate of return (IRR), it means that the project is not generating sufficient returns to satisfy investors' expectations. In this case, the net present value (NPV) of the project will be negative, indicating that the project will not generate enough cash flows to cover its costs and provide a positive return to investors. Therefore, the correct choice is B, negative NPV. Choices A, C, and D are incorrect because they do not reflect the impact of the opportunity cost of capital on the project's financial performance.

If the Opportunity Cost of Capital for a Project Exceeds